Thursday, April 1, 2010

Cannabis country?

"It's the only thing we have that brings money into the county," saidMendocino County Supervisor John Pinches, who believes that marijuanaaccounts for at least half of the county economy.

Estimates of the value of the county's pot crop range from $1.2 billionto $4.4 billion. In comparison, the county's total taxable retail saleswere $1.3 billion in 2007, according to the Center for EconomicDevelopment at CSU Chico.

Pinches is one of many in the county who believe now is the time tostart planning on how to capitalize on Mendocino's famous crop, shouldit become legal.

Local marijuana proponents and opponents alike widely believelegalization is inevitable, that regulation of the plant will be crucialto keeping it out of the hands of children and that taxation could boostcounty coffers and help offset the criminal and societal costs of makingpot more widely available.

A measure that has qualified for the statewide ballot in November wouldmake it legal for anyone over 21 to possess up to an ounce of marijuanaand to grow it for personal use. Commercial operations would requiregovernment approval. It also would authorize local governments toregulate and tax pot, which remains a primarily underground economydespite being legal for medicinal use.

A Field Poll conducted in 2009 indicated 56 percent of Californiansfavor legalization. But marijuana would remain illegal under federallaw, so it's unclear how passage of the measure would play out.

Nevertheless, the initiative has sparked speculation and debate over itspossible effects. Some pot growers fear legalization will cause aprecipitous drop in pot prices, while others see new businessopportunities for counties that have a head start on name recognition.

A public forum on the future of marijuana was held in Humboldt Countylast week, and another is planned in Mendocino County this month. Thetwo counties, along with Trinity County, comprise the world-famous"Emerald Triangle" and rank among the state's top marijuana producers.

The April 24 forum, "The Future of Cannabis in Northern California,"will be held at the Saturday Afternoon Club in Ukiah. It's sponsored bymarijuana advocates but will include law officials and businessrepresentatives.

"It affects our community, and it's time to have the discussion," saidBert Mosier, the chief executive officer of the Ukiah Chamber ofCommerce and a scheduled speaker.

Visions for the future include marijuana smoking salons where people whoare 21 or older could sample Mendocino County's best weed.

"I definitely think if they legalize it, that would be a market," saidMatthew Cohen, who heads a medical marijuana cooperative near Ukiah.

Tours of marijuana cooperative gardens also could attract visitors tothe county, he said.

It would be "exactly like wine tasting," said Wendy Roberts, a Mendocinobusiness consultant and candidate for the county Board of Supervisors.Like many in Mendocino County, she worries about societal problems,including children having increased access to marijuana, but alsobelieves legalization is inevitable and necessary for limiting its useto adults.

Advocates say Mendocino County is ideally situated to benefit frommarijuana-related tourism because it's known worldwide for the qualityand quantity of its product.

Pot now is cultivated throughout the state, but Mendocino County remainsamong the top five producers of marijuana seized by law authorities.More than 450,000 marijuana plants were seized in Mendocino Countyduring the state's annual pot-eradication effort in 2009, according tolaw officials. That's just about 10 percent of the 4.4 million marijuanaplants seized in the state.

Mendocino County Sheriff Tom Allman estimates that only about 10 percentto 15 percent of the pot grown in the county is eradicated each year.That estimate is widely used to compute the value of the crop. The topestimate of $4.4 billion is based on a conservative assumption that eachplant produces one pound of marijuana valued at $1,000, said Ellen Komp,of North Coast NORML -- National Organization for the Reform ofMarijuana Laws. In fact, they can produce several times that much, shesaid.

Currently, an ounce of marijuana sells for $150 to $500 an ounce, saidAaron Smith, California policy director for the Washington-basedMarijuana Policy Project.

A California Board of Equalization analysis estimates that legalizingand taxing pot in California could yield $1.4 billion in revenue if a$50-per-ounce levy were to be placed on retail sales in addition tosales tax.

Sales taxes alone would yield $392 million, according to the report.

The Board of Equalization analysis takes into consideration that priceswill fall if pot is legalized. It estimates a drop of 50 percent, butstates that consumption could increase by 40 percent as a result of theprice drop.

The decline in prices is expected to take much of the profit out of pot,a concern for some underground operators. They also fear that bigtobacco companies will step in and begin growing pot on farmland in theCentral Valley, effectively killing North Coast production.

Smith, of the Marijuana Policy Project, believes prices will drop, butnot as dramatically as some growers fear. "There's no reason to beconcerned that the industry will go away," he said. Local growers whocreate niche markets, like organic and hand-picked marijuana, should dowell, Smith said.

Many proponents of legalization say a drop in pot prices would be good."It's way too expensive," said Mike Johnson, who runs a Mendocino Countymedicinal cannabis club. It would be more accessible for people whoreally need it for medicinal purposes if it was cheaper, he said.

Proponents of legalization say a decline in profit also would deterpot-related crime. Law enforcement officials don't buy the argument.

"You're still going to have a black market," said Mendocino CountySheriff's Capt. Kurt Smallcomb.

Of the estimated 8.6 million pounds of marijuana grown in California in2006, only 1 million pounds was consumed within the state, according tothe Board of Equalization analysis.

That means most of it is being exported to other states, where it wouldremain illegal unless the federal government decriminalizes marijuana.The exports will remain illegal and untaxed and continue to attractcriminals to the state, law officials said.